2015-06-04 08:35 ET - News Release

Mr. David Adamson reports

CASTLE MOUNTAIN REPORTS FINAL GOLD RECOVERIES OF 81% FROM COLUMN TESTS

Castle Mountain Mining Company Ltd. has released final results from its previously announced metallurgical test program at its Castle Mountain gold project in southeastern California. Recoveries averaging 81 per cent, were achieved from the column leach tests on heap leach grade (material at less than five grams per tonne gold). High-grade material (greater than five grams per tonne gold) averaged greater than 98-per-cent gold recovery in a standard mill/gravity/leach test circuit. These combined results compare well with historical heap leach recoveries of 77 per cent achieved during past production by former operators.

"Very good and rapid recoveries of gold at all crush sizes are extremely positive and bode well as we continue to optimize all aspects of the Castle Mountain deposit," commented president and chief executive officer, David Adamson.

Metallurgical testing highlights:

• Castle Mountain materials can be leached successfully using cyanidation, and more specifically by heap leaching.
• Lime and cyanide reagent consumption observed during the testwork campaign consistently showed low cyanide consumption and low to medium lime consumption.
• Agglomeration will not likely be required to obtain good leach solution application rates.
• Castle Mountain materials are relatively clean, having little or no sulphides, copper or mercury.
• Castle Mountain materials are considered soft to medium and not abrasive, lending to low processing costs for crushing.

Column leach and bottle roll test results

The CLT program performed by McClelland Laboratories of Reno, Nev., has proven to be very successful. Material for the crushed CLT testing included a total of 39 columns, taken from four drill holes 12, 13, 14 and 17. It was composited in a manner to represent broad mineralization types and grades (0.17 to 48.73 grams per tonne gold), with high-grade material included in most composites. The samples span a vertical range of zero to 1,016 feet (zero to 310 metres) below surface, include 1,200 metres of large-diameter-sized (PQ-sized) core and thus test a representative section of the deposit. It was tested at 9.5-millimetre, 19-millimetre and 50-millimetre crush sizes.

                      HEAP LEACH GRADE RECOVERIES

                  9.5 mm              19 mm              50 mm               

51 days            80.0%              76.0%              65.7%              
114 days           83.3%              80.0%              71.8%              
max                83.9% 156 days     80.4% 150 days     72.8% 145 days     

(i) Results not inclusive of high-grade columns averaging greater than 
five g/t Au.                                                                         
(ii) Overall recovery of 81 per cent across all crush sizes excludes 
high grade and takes 156 days.

In the majority of samples, over 50 per cent of gold was recovered in the first 15 days. Overall average recovery for the CLT including the high-grade (average greater than five grams per tonne gold) columns was 78 per cent. The finer crushed material increased the recovery rate and marginally increased the final gold recovery. Agglomeration is not expected to be required as there were no percolation issues, the reagent consumption was low to average. Bottle roll tests and column tests performed on the same material gave final leach recoveries that tracked closely with each other, even with the fine grind tests. This close correlation will allow bottle roll testing to be used as a predictor of column leach recovery. Run of mine testwork is still under way.

Other testwork

Additional testing, including Bond crusher work index and Bond abrasion index on rock types most commonly associated with mineralization was carried out by FLSmidth at its labs in Midvale, Utah. The 20 specimens of each sample tested exceeds Bond's 10-piece minimum. Samples were prepared to meet all testing standards and all work was conducted according to industry best practices. The results from these tests show the CWi and the Ai classify as very soft to medium. Results demonstrate that low crushing costs are expected, through reduced energy and wear component replacement.

            BOND CRUSHER WORK INDEX AND BOND ABRASION INDEX RESULTS


Client       Number of    Relative    Crusher      Work (kwh/ Classification
sample ID    samples      density     index (kwh/  metric t)                
             tested                   short t)                              

Ash tuff     20           2.11        9.7          10.7       Very soft/soft
Conglomerate                                                                
Multilithic  20           2.13        13.6         15.0       Soft/medium   
Rhyolite     20           2.30        13.9         15.3       Soft/medium   
Rhyolite-                                                                   
breccia      20           2.19        13.9         15.4       Soft/medium   

Bond abrasion  Classification 
index                         
(grams)                       

0.0115         Very soft      
0.2165         Medium         
0.2978         Medium         
0.1602         Soft           

Warren Woods, chief operating officer, stated: "The entire program has been a great success. The strong correlation between the column and bottle roll tests across most samples may allow us to use bottle rolls as early indicators of column performance going forward. Taken together results indicate that oxidation extends to the known maximum depths of drilling to date, well below pits modelled in the PEA(1). The positive numbers from the current round of tests should remove any doubt as to the leachability of this material at all sizes."

William J. Pennstrom Jr., metallurgical consultant for the company, a qualified person as defined by National Instrument 43-101, has reviewed and approved the contents of this press release. Mr. Pennstrom verified the data by reviewing all available data and the work completed by McClelland Laboratories of Reno, Nev. No limitations were imposed on his review process. McClelland Laboratories is independent of Castle Mountain Mining.

Note:

1. A National Instrument 43-101 technical report for the initial mineral resource estimate prepared by RPA Inc. was filed on Dec. 11, 2013. The resource estimate is 182 million tonnes grading 0.6 gram per tonne gold for 3.15 million ounces in the indicated category and 63.7 million tonnes grading 0.57 gram per tonne gold for 1.06 million ounces of gold in the inferred category. Resources were calculated using a cut-off of 0.14 gram per tonne gold. On June 5, 2014, the technical report for its preliminary economic assessment, prepared by RPA, was filed. Static case economics, at a gold price of $1,300 per ounce, show a net present value (5-per-cent discount rate) of $122-million and posttax internal rate of return of 29.7 per cent. Both documents are available on SEDAR and on the company's website.

We seek Safe Harbor.